May to Force U.K. Companies to Publish Executive-Worker Pay Gap
May to Force U.K. Companies to Publish Executive-Worker Pay Gap
(Bloomberg) -- U.K. Prime Minister Theresa May plans to force listed companies to publish the ratio between the pay of chief executives and average employees, as part of a crackdown on corporate governance.
May, who pledged the measure in the Conservatives’ election program, will announce the measures next week, according to a government official who declined to be named. More radical measures, such as putting workers on company boards and binding shareholder votes on pay, have been dropped, the Financial Times reported.
May, who came to power last year promising to protect those who have been excluded from the benefits of globalization and rewrite the rules of capitalism, lost her parliamentary majority in the snap election she called in June. That has cramped her room for maneuver and strengthened the hand of Chancellor of the Exchequer Philip Hammond, who is a vocal supporter of business interests.
The government will also create a public register of companies whose investors revolt over boardroom pay, Sky News reported yesterday. The Investment Association, a trade body, will oversee the register, according to Sky. Business leaders had raised concerns about binding votes on pay, saying they may be incompatible with existing contracts.
--With assistance from David Hellier
To contact the reporter on this story: Svenja O'Donnell in London at sodonnell@bloomberg.net.
To contact the editor responsible for this story: Emma Ross-Thomas at erossthomas@bloomberg.net.